Cab aggregators go the distance, Utoo hikes fares

App-based aggregators have rapidly expanded in the city and micro-pockets of business like far-flung IT office complexes and automotive hubs near Chennai.Bharani Vaitheesvaran | ET Bureau | September 15, 2016, 11:11 IST

CHENNAI: Cab-driver Sivasankar panics every time his smartphone tells him there is a long-distance rider hailing. A recent experience took him from a high street in Alwarpet in Chennai all the way to the inroads of a western suburb Thirumazhisai, from where it was a wild goose chase for customers and a frustrating dry run back into the city.

App-based aggregators have rapidly expanded in the city and micro-pockets of business like far-flung IT office complexes and automotive hubs near Chennai. Recently, Uber ventured, after Ola, into suburbs like Vandalur and Guduvanchery to cater to a burgeoning populace headed to work in the Mahindra World City.

As cab platforms strike out at strategic markets, the missing link appears to be the city-to-suburb leads, which aggregators are trying to fix through segregated pricing.The latest entrant in the business Utoo took the plunge on Wednesday.

On Wednesday, Utoo announced it will charge double the usual Rs 8 a km for rides be yond 15 km. The founder says the move will service a large, untapped market at a price that will be attractive to drivers.

"Our drivers have to drop customers off at small hamlets in suburbs. This is a real business need, which calls for appropriate pricing so that these leads are taken up by our driver partners," said C Sivasankaran, the Aircel founder who had recently pitted himself against Ola and Uber. His startup is slated for an official launch sometime in October. While Sivasankaran rings in the new pricing on Wednesday, San Francisco-based Uber had brought in a tiered pricing model for long-distance trips well over a year back. UberGo charges Rs 15/km after 20km.

While Uber's spokesperson was not available for comment, a blog post from the aggregator reasoned the price hike was for "partner economics". Ola, however, says, it has a fairly distributed demand scenario.An Ola spokesperson said, "Drivers operating on the Ola platform across the length and breadth of the city have consistent access to demand at all times because of the large customer base that Ola has...," not revealing whether it has a layered pricing system for long-distance rides.